Standard Life pressures Exchange bidder

DEUTSCHE Borse will come under renewed pressure from its own shareholders to explain why it should bid at least £1.35bn for the London Stock Exchanged.

Standard Life, a 1% stakeholder in the Frankfurt exchange, has become the first major British institution to voice its reservations.

The group's European equities fund manager, Richard Moffat, said: 'The onus is on Deutsche Borse's management to demonstrate why the purchase of the LSE creates more value for shareholders than any other strategies.'

Last week, the Borse hid behind Takeover Panel rules, saying it would not respond publicly to calls by hedge funds TCI and Atticus Capital to hold a vote on a bid for the LSE. Both funds indicated they would prefer it to hand cash back to shareholders.

Investors in potential rival bidder Euronext will be given the opportunity to vote on a takeover bid.

Deutsche Borse is reluctant to go hostile with its bid, at an indicative 530p a share. That is way below the price of LSE shares, which closed at 580p on Friday. But the Borse, led by Werner Seifert, could step up the tempo by indicating a higher offer and asking the Office of Fair Trading to look at any competition concerns.

The bid battle has highlighted the low level of corporate governance in Germany. The Borse has said it will comply with existing rules but this could mean it will not make all its intentions public until it is too late for shareholders to veto them.